With-Profits

1.1

Subject to 1.2, this Part applies to a UK Solvency II firm carrying on with-profits insurance business.

1.2

This Part does not apply to with-profits insurance business that consists of effecting contracts of insurance or carrying out contracts of insurance that are Holloway sickness policies.

2.1

A firm must ensure that it holds assets in each of its with-profits funds of a value sufficient to cover the with-profits policy liabilities in respect of all of the business written in, or transferred into, that with-profits fund.

3.1

A firm must ensure at all times that its strategy for distribution of discretionary benefits in respect of each of its with-profits funds:

1. (1) is affordable and sustainable; and
2. (2) cannot reasonably be expected to have an adverse effect on the safety and soundness of the firm as a whole, or on the benefit security of all policyholders of the firm.

4.1

If a firm is using, or intends to use, support arrangements to contribute to benefit security for the policyholders of a with-profits fund, it must ensure that:

1. (1) all the terms and conditions governing those support arrangements, including the circumstances in which they take effect and the terms on which they are or may be repayable, are adequately documented in the firm’s records; and
2. (2) the extent of any restrictions on the firm’s use of those support arrangements is clearly identified.